Prepared food distribution service Power Supply rebrands as Territory and raises $6.7 million

If you thought the world didn’t need another prepared food distribution and delivery service, apparently you’d be wrong, as the newly minted startup Territory has managed to pull in $6.7 million for its healthier eating options.

The Washington-based company formerly known as Power Supply raised the money as it looks to expand to new geographies and consolidate its position in the Washington, DC, Southern California and San Francisco markets it’s already operating within.

The timing is auspicious, as another twist on the meal delivery service, Maple (which was backed by the Momofuku-famous celebrity chef, David Chang) has just shut down. Another prepared food delivery company, SpoonRocket, shut down last year.

Territory has what investors and the company’s founders hope is a fresher take on the food preparation and distribution game. The company taps local chefs for its supply and gives them pre-determined menus or ingredients selected by nutritionists or healthcare facilities that they can use to fulfill customer orders.

The company incorporated in 2011 when co-founders Patrick Smith and Robert Morton, old colleagues from the financial analysis website The Motley Fool hooked up with Jeff Kelly and Josh Krieger — two DC-based food entrepreneurs.

The company launched in DC in 2011 and expanded in 2015 to Los Angeles, followed by San Francisco last year, and Dallas earlier this year. The slow expansion is a reflection of the methodical way in which the company approaches growth.

To date, Territory has served 2 million meals through its roughly 350 distribution locations and delivery service.

The secret to the company’s success so far has been its go-to-market strategy, which depends on reaching out to customers through places like gyms and wellness centers.

It’s pre-prepared food for the crossfit set, a customer base that’s a reflection of the founders’ own lifestyle.

“After having ignored my health for a long period of time… I popped up and I realized my mortality was becoming pretty evident,” said Smith. “It led me to a commitment around fitness and nutrition.” At the time, he said there were few companies that truly offered the kind of dietary options he felt he needed. So he founded his own.

Smith and his co-founders aren’t alone, according to Morton. The 20-something to 40-something professionals committed to healthy lifestyles are naturally occurring hives of people, he said. Territory partners with the owners at the gyms and workout facilities that that population frequents and encourages those hives to pitch Territory meals as part of a healthy lifestyle for their customers.

The ready-to-eat meals are prepared by chefs who are working in concert with nutritionists on menu plans.

Initially meals came in paleo-diet or omnivorous options.

With the new financing, the company will offer diets tailored to a 30-day dietary reset that will identify foods that have “a negative impact on cravings, metabolism, digestion and inflammation;” MedStar Healthy meals that are 350 to 600 calories, contain 30 to 60 grams of carbohydrates and fewer than 750 milligrams of sodium with no more than 7 grams of saturated fat (the diet was based on guidelines from the American Diabetes Association and the American Heart Association); a Mediterranean diet, designed by celebrity dietician Ashley Koff RD; and diets for new and expecting mothers and macronutrient meals are also on offer.

Each meal costs $13.

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For Upfront Ventures partner Kara Nortman, who backed Territory’s initial funding round, the business case was too compelling not to invest. The company had gained traction in a market where many other companies had failed to keep a foothold, and Nortman was curious how.

Nortman says the company addresses the changing behavior patterns of consumers (especially middle class and upper class consumers) who no longer shop at grocery stores, but are looking for the ability to cater their consumption patterns to other aspects of their lives. The business model and numbers were convincing enough for Upfront to reinvest.

New investors NRV and Lewis & Clark Ventures and previous backers like The Motley Fool Holdings also believed in the company enough to back its vision.

“By combining technology and logistics expertise with carefully curated, healthy and delicious meals from top local chefs and restaurants, Territory is reaching a loyal customer base, which in turn, enables attractive margins and high growth potential,” said NRV co-founder and managing director Ted Chandler, in a statement.

Smith and his team see their company as part of the growing push for a health and wellness based on an understanding of total health, rather than through dietary supplements or some sort of miracle product.

“There’s this massive shift going on and a mind-shift from ‘Is there a pill for that?’ to ‘Is there a food for that?’ ” Smith says. “We’re in the super early days around genetic sequencing or microbiome treatment, but right now there are very clear guidelines around nutrition.”

Finally, Smith sees a social mission beyond catering to his bourgeois contemporaries. Like other companies promoting a lifestyle, Smith thinks there’s a place for his company’s meals in a more varied range of homes.

“The impact side of this is super important to us,” Smith says. “The common prescription to be healthy is to eat better and move more. And our company’s [prescription] is to help people find that and solve that in their lives.”

Food access is a big priority at the company. They have a national program in place to partner with farm-to-school programs around the country. And there’s a program that donates to soup kitchens in local areas the 100-or-so test meals that the company’s cooks make. Territory also encourages its employees to volunteer.

“This is a really authentic thing that’s super important to us,” Smith said. “How do we impact the most people possible in a proactive way to maximize their health.”